Suchergebnisse

In this paper the impact of federal government budgetary policy on deficits, the public debt and net interest payments during the Reagan Administration is examined. Large deficits are shown to inflate the public debt and increase the annual cost of debt servicing. This rapidly rising net interest burden, combined with political aversion to legislated tax increases and spending cuts, minimizes the possibility of significant deficit reduction and increases the probability that some form of balanced budget rule eventually will be adopted.

This study investigates factors influencing monetary policy decisions of the Federal Open Market Committee (FOMC) over the period 1960–1998. Competing perspectives regarding the process of monetary policy making exist, with some researchers contending the FOMC makes short‐run policy decisions based solely on "objective" macroeconomic considerations and others arguing that political and other nonmacroeconomic considerations significantly influence monetary policy voting. Empirical studies support both views in varying degrees. This article presents a model of FOMC decision making which posits that (1) the current/prospective macroeconomic environment at the time of FOMC meetings is the most important consideration of monetary policy makers, and (2) nonmacroeconomic variables receive little attention unless macroeconomic conditions are difficult for policy makers to assess. Probit results support the implications of the model.